La Brea, Inc.reported sales of $1, 200 in May and a gross profit of $370.The company had a May 1 inventory of 60 units that had a total cost of $300.May purchases and sales were as follows: $\begin{array}{llll}
&\text { Purchases }&&\text { Sales }\
\text { May } 7 & 40 \text { units } @ \$ 6 & \text { May } 2 & 20 \text { unit } \
10 & 20 \text { units } @ \$ 7 & 8 & 40 \text { units } \
18 & 40 \text { units } @ \$ 8 & 12 & 10 \text { unit } \
24 & 20 \text { units } @ \$ 9 & 20 & 20 \text { unit } \
28 & 20 \text { units } @ \$ 10 & 26 & 30 \text { unit }
\end{array}$
La Brea, Inc., must use
A)LIFO perpetual
B)FIFO
C)weighted average
D)LIFO periodic

Question

La Brea, Inc.reported sales of $1, 200 in May and a gross profit of $370.The company had a May 1 inventory of 60 units that had a total cost of $300.May purchases and sales were as follows: $\begin{array}{llll}
&\text { Purchases }&&\text { Sales }\  
\text { May } 7 & 40 \text { units } @ \$ 6 & \text { May } 2 & 20 \text { unit } \
10 & 20 \text { units } @ \$ 7 & 8 & 40 \text { units } \
18 & 40 \text { units } @ \$ 8 & 12 & 10 \text { unit } \
24 & 20 \text { units } @ \$ 9 & 20 & 20 \text { unit } \
28 & 20 \text { units } @ \$ 10 & 26 & 30 \text { unit }
\end{array}$
 La Brea, Inc., must use
A)LIFO perpetual
B)FIFO
C)weighted average
D)LIFO periodic

Quizplus · Accepted Answer

The LIFO perpetual method calculates the cost of goods sold based on the most recent purchases at the time of each sale, which matches the given sales and inventory data.

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